On Monday 19 October, in the Japanese Senate budget committee, debate turned on the food VAT-cut bill, which on Tuesday 20 enters plenary in the House of Representatives. It is not law. The Takaichi cabinet tabled it on 9 October, Diet session 222. The Senate has not voted it: the governing party has no majority there.

The bill, on the Senate site and in the National Tax Agency Q&A, is conditional on passage: from 1 April 2027, for two years, VAT on food already at the reduced rate would move from 8% to 1%. Not zero at the till. Eating out and alcohol stay at 10%. The government talks of “zero in substance”, with a workers’ stipend beside the 1% rate. That is the offer, not a vote.

Jiji, on 18 October: the opposition — CDP, Komeito, the National Democrats, Democratic Reform — wants the money source and the stipend’s details. Prime Minister Sanae Takaichi said she did not want deficit bonds and would cover it from spending and revenue. How much, to whom, she did not say. Komeito: as it stands, we cannot vote yes.

TBS, Monday, still in the Senate: Takaichi, on bond issuance, “appropriate control”. We have not mashed those two treasury formulas into one sentence. Kyodo, at filing: about ¥10 trillion over two years, with no source written down. That is not a closed budget.

The opposition wants cash in hand, not only a rate. CDP: help for low and middle incomes. Komeito: ¥80,000 a person over two years. Takaichi: the VAT cut is, in her view, the fastest. Jiji: the gap is not closing. LDP accepted that Takaichi would be in the Tuesday plenary after it had wanted to send only finance minister Satsuki Katayama.

We have not written that the Senate cut VAT. It is a Monday in committee, a Tuesday in the lower house, a minority government looking for votes. If the law passes, the 1% rate is temporary; if it does not, food stays at 8%. That is the state of play on 19 October.

Image: Suicasmo, the National Diet Building, Tokyo, 9 February 2017, CC BY-SA 4.0, Wikimedia Commons. Not Monday’s committee.

Sources consulted: 野党、財源・制度設計追及へ　消費減税法案、２０日から審議 — Jiji; 飲食料品に係る消費税率の引下げ及び給付付き税額控除について — Cabinet Secretariat.